Brent is back trading at c. $70/bbl after a weeklong collapse to the mid-60 level on weaker demand data and rising COVID infections in the US and China
We increase our Brent annual average forecast marginally to $68.67/bbl in 2021 (+$0.39/bbl on previous), due to a sustained spell above $70/bbl in recent months
We see prices rising in 2022 due to continued OPEC+ market management
Our 2021 demand growth forecast eases to 5.39 million b/d (-30,000 b/d on previous), due to COVID concerns and slower growth
We increase our 2021 supply growth forecast to 1.75 million b/d (+130,000 b/d on previous) on a brighter outlook for US LTO, though production will still decline there on average
A recovery in LTO production has started a little earlier in the year than expected, so firm growth in 2022 is now even more likely
The rig market has seen demand increase, but operators are still in the driving seat, locking in low rates with long contracts
We see the market in deficit by 1.74 million b/d in 2021, with supply growth undoing not even one third of the decline in 2020
For 2022, a surplus of 1.34 ...
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